New Massachusetts solar power incentives get SMART

A new solar power incentive program is being heralded as an important step forward in creating a Massachusetts solar policy that’s more equitable, predictable and beneficial to a greater number of organizations throughout the Commonwealth. The Solar Massachusetts Renewable Target (SMART) program aims to expand the benefits of solar power by incentivizing solar projects on a consistent basis.

Historically, Massachusetts has had one of the most successful solar power incentive programs in the country. The Solar Carve-Out and Solar Renewable Energy Credits (SRECs) program within the Massachusetts Renewable Portfolio Standard have led to dramatic solar growth. But because SRECs were a tradable commodity tied to market conditions, their value has been difficult to predict, leading to industry volatility.

The SMART program, the product of a robust statewide input process by the Massachusetts Department of Energy Resources (DOER), will enable the state to more than double its solar capacity from 1500 MW to 3.2 GW, while providing more consistent incentives. The program stabilizes solar power incentives by providing system owners a fixed contract price and term for solar projects under 5 MW, in set “blocks” of 200 MW each. Once one block reaches capacity, the incentive value will be decreased for the subsequent block of 200 MW, and so on.

This blog post, published by the Institute for Local Self-Reliance, explains how the SMART program is designed as an additional incentive on top of net metering rates, which are currently being considered for expansion by the State Legislature.

After an initial competitive bid process to set basic compensation rates, the program will reward projects along several criteria: project size, location and type of off-taker. The program encourages participants to take advantage of already-developed locations, such as brownfields, buildings, landfills and parking lots (which can accommodate solar canopies or carports), while providing a disincentive for “greenfield” developments. In addition, projects that benefit certain energy “off-takers” (the ultimate customers or beneficiaries of the energy), such as low-income, public or community solar developments, may also qualify for these additional incentives, or “adders.” Variable adders are also available for solar projects that include energy storage.

The intent of the adders is clearly to incentivize development of solar projects that may serve a public interest not currently captured by the solar market. Fleshing out the market with these incentives is an essential component of the shift toward an Energy Democracy model of renewable energy ownership.

All energy distribution companies (EDCs) in the Commonwealth will participate in the program. The DOER indicates an official SMART start date in mid-2018, which implies that customers who initiate solar projects closest to the start date will benefit from the first and most lucrative “blocks” of the program.

Applications will need to be submitted through a soon-to-be-identified MA Solar Program Administrator, who will act as an independent verifier. This person will determine total amounts to be paid and may issue incentive payments on behalf of EDCs. Block reservations will be provided on a first-come, first-served basis.